After recent acquisitions have once again changed the landscape Quintin, our co-founder and Technical Director, takes a look at the New Zealand web hosting industry.
The only constant I have known in my life is change. This has been true of the hosting industry for 16 years now and I cannot see why next year will be any different.
As 2020 limps towards the finish line, Kiwis find themselves in a pretty interesting place. At the same time that we are being encouraged to “support local”, a number of historically NZ-owned tech businesses are rushing for the exits. The latest headlines have been about our biggest online retailer, Mighty Ape, which is following the largest local hosting providers, Openhost and Freeparking, to the departure lounge.
As a business owner, I can see why these decisions are something to celebrate. A successful exit shows that you’ve run a good race. But historically customers haven’t always won from deals like these - especially after the original owners, who have deep ties to the people they serve, eventually move out of the company. When you build a company from scratch in a market the size of New Zealand’s, your customers are your friends and acquaintances. They are businesses and people who all link closely into the same economy and work hard to raise the tide and every boat on it. A new owner without local roots doesn’t share the same interests.
Being a business leader has always been a lonely role and the demands this year have been turned up to 11. In a normal year, when the right offer comes in you might have imagined spending more time with your family or restarting a long forgotten hobby. This year, you probably imagined being able to stop worrying about tomorrow and start living in the present again.
NZ is a great place to do business, but lately you do feel like you’re running from a 800-pound gorilla. Which brings me to the point of this piece. It feels like NZ doesn't actually own as many of our great companies as we used to. Especially NZ web hosting companies. NZ-owned businesses are being acquired by overseas companies at a decent clip, while Kiwi investors only seem to be interested in selling houses to each other.
It feels like NZ doesn't actually own as many of our great companies as we used to. Especially NZ web hosting companies.
I am not saying that every overseas acquisition of an NZ tech company has made things worse. But I am saying that most NZ-owned tech companies do not ship millions of dollars overseas - money that could be invested here.
Too often we’ve seen good New Zealand hosting companies move to new owners and end up delivering lower-quality service to their customers. You might think that from my point of view this is all good news - aren’t those unhappy customers our opportunity? Not when you add in another effect of widespread acquisition.
This industry has many more brands than companies, mostly because of international acquisition. There’s a general assumption that, now, most recognisable brands in the industry here are probably part of one or two large companies. I’ve even had customers come into the office (back when that was a thing) and tell me that we were part of a big competitor! It’s an incorrect assumption that they made just because so many other hosting brands were clustered under that particular umbrella.
The NZ hosting industry history books are littered with botched mergers and acquisitions, giving all NZ hosting companies a bad reputation. The latest example being Openhost, I truly wish them the best but customers have publicly been fairly vocal about how things are going over there. On the other hand, we have successfully acquired three businesses in the past 16 years, growing all of them while consistently improving the service offered. The most recent example is Domains Direct. Earlier this year its founder, Daniel Williams, approached us specifically to ensure that his customers didn’t lose out when the deal was done.
Daniel chose us because of the record that we’ve built up standing behind important local initiatives. Back in March for example, covid19.govt.nz became one of the most important websites in the country, almost overnight. Its developers chose our platform so they could execute this crucial site launch within a very tight timeframe. They used Cloud Containers which meant that no humans were involved in deploying covid19.govt.nz on our platform. That could have been the end of the story but because we’re local, our team spotted the site straight away and realised its importance.
As the Prime Minister directed the “team of five million” to the new Covid-19 site, we worked our socks off to keep it online in those first few days. Cloud Containers did their job, and so did the SiteHost team. I don’t believe that any overseas hosting provider would have had the ability, let alone the drive, to spot that particular .nz site and support it the way we did.
So I want to be very clear, SiteHost and our sister brands (including MyHost, WebSlice and Domains Direct) are all 100% Kiwi owned. If you’re hosting somewhere else and you want to support local, please get in touch today. When it comes to growing and developing NZ-owned business, one of the biggest statements you can make is as a customer who chooses to stay local.
We also have no plans to sell SiteHost, quite the opposite in fact. We now have a small number of team members overseas providing around-the-sun support, and this year have continued to invest in our local economy by growing our NZ-based team by 20%. Today, SiteHost has staff in five different regions around the country. Next year we’re bringing out a new and incredibly ambitious product with huge potential for growth, but that’s a story for another day. We’re here for the long haul.
Lastly, we want to hear from other NZ-owned business leaders. I believe that the best way for us to keep succeeding is by working together. So, how can we help you tell your story? How can we help you be more successful? If there’s anything you want to ask, you know where to find us - right here in Aotearoa.